www.imacs.in Media & Entertainment September 2006 www.imacs.in Contents • Market Overview • Government regulations & policy • Advantage India and business opportunities MEDIA & ENTERTAINMENT www.imacs.in Market Overview • Market Overview • Government regulations & policy • Advantage India and business opportunities MEDIA & ENTERTAINMENT MEDIA & ENTERTAINMENT www.imacs.in Market Overview Indian Media & Entertainment Industry Zooming ahead India Media & Entertainment Industry INR Billion 1000 CAGR 19% 562 473 600 400 200 0 • • • • • • • 837 800 402 353 * 686 * E*: Estimate, F*: Forecast 2005E 2006F 2007F 2008F 2009F 2010F Years Current Market Size is estimated at USD 7.72 bn Expected to reach USD 18.32 bn by 2010, a CAGR of 19% Maximum growth expected in Television and Film segments More than 300 national and regional TV channels Close to 1000 films made every year Liberal FDI policies across all the segments of the industry Government focusing on regulations to give further impetus to the industry Source: IMaCS Analysis, FICCI-PWC Frames 2006 Report MEDIA & ENTERTAINMENT www.imacs.in Market Overview Major constituents • Television is the largest segment with close Breakup of Indian Media & Entertainment Industry Outdoor Advertising 2.5% Live Entertainment 2% Internet Advertising 0.3% • Television’s share expected to increase to Television Print Media 41.9% 30.9% Radio 0.8% Films Music 19.3% 2.0% Source: Industry estimates, IMaCS Analysis to 42% share in industry revenues followed by print media at 30.9% and films at 19.3% in 2005 more than 50% by 2010 at the cost of print media’s share MEDIA & ENTERTAINMENT www.imacs.in Market Overview Key Drivers of the Indian Media & Entertainment Industry • Enabling regulations related to broadcasting, print and radio by the Government Regulation • Development of content for niche viewers • Pricing remains a key driver, whether it is for Content Consumerism • Increased consumerism and increased Key Drivers advertisement spend by marketers (i.e.more revenues for media companies) fueling further growth Advertising Pricing spend Technology cable subscription, film tickets or newspaper prices • Use of technology for special effects, animation and other creative work leading to better quality of media products MEDIA & ENTERTAINMENT www.imacs.in Market Overview Indian Television Industry Wholesome entertainment Projected size of Indian Television Industry 500 INR Billion TV Software 5% 427 400 327 TV 250 300 200 Indian Television Industry Revenue Breakup - 2005 170 148 203 Advertising 37% 100 0 2005E 2006F 2007F 2008F 2009F 20 10F E*: Estimate F*: Forecast Years • Largest segment in the industry with market size of USD 3.24 bn in 2005 • Expected to reach USD 9.34 bn by 2010, a CAGR of 24% • Subscription accounts for 58% of the total revenues followed by advertising and software • India currently has 105 million TV households and over 60 million cable connections • TV penetration expected to increase to 135 million households and cable connections to 85 million households by 2010 Source: IMaCS Analysis TV Subscription 58% MEDIA & ENTERTAINMENT www.imacs.in Market Overview What do the viewers watch in India? Genrewise Television Viewership Share in India 3% 4% 1% 2% 8% 39% 5% Mass Entertainment Hindi Film Channels Kids Channels Regional Channels English Entertainment Music Channels News Channels Sports Channels 38% • Mass Entertainment Hindi and regional language channels attract almost 80% of the total TV viewership in India • Niche channels like News and Sports gaining ground Source: TAM Media Research MEDIA & ENTERTAINMENT www.imacs.in Market Overview Indian Film Industry The Bollywood dreams Density of Film Theatres - India & Abroad Projected size of Indian Television Industry 2010F Years • • • • • • 12 20 0 Largest number of films produced in the world~1000 films every year More than 3 billion tickets sold in 2005 Gross revenues of over USD 1.49 bn in 2005 Expected to reach USD 3.35 bn by 2010, a CAGR of 18% Large scope for growth in number of screens Digitisation of theatres and growth of multiplexes fueling further growth Source: IMaCS Analysis, FICCI - PWC Frames 2006 Report & UNESCO India 2009F 30 US 2008F 52 53 France 2007F 45 46 61 Denmark 2006F 40 43 Ireland 2005E 60 Italy 0 77 80 Spain 50 100 Germany 68 79 1 53 Belgium 100 1 13 97 132 120 UK INR Billion CAGR 18% 1 50 Screens/ million population 117 200 MEDIA & ENTERTAINMENT www.imacs.in Market Overview Hit or flop Breakup of Indian films market Breakup of Films Market in India 8% 1% 15% 45 % Hindi Cro ssover Hindi Tamil Telugu Foreign Malayalam B engali Others 17% 1 0% • • • • 2% 2% Hindi films account for almost half of the total market Foreign films, primarily from Hollywood have a market share of 2% Regional language films account for the rest of the market Dubbed Hollywood films a new trend Source: IMaCS Analysis, Industry estimates MEDIA & ENTERTAINMENT www.imacs.in Market Overview Indian Music Industry Soul searching Projected size of Indian Music Industry Gerewise Music Sales in India - 2005 INR Billion 7.6 7.4 7.4 7.4 7.3 7.2 7.2 7.0 8% 7% 10% 7.2 40% 7.0 E*: Estimate F*: Forecast 6.8 2005E 2006F 2007F 2008F 2009F 2010F 8% 6% Years • Unique structure with film and devotional music • • • • 21% New Film Music dominating the market Popular Music Non-film albums and remixed songs gaining market Others Total revenues close to USD 0.15 bn in 2005 Expected to reach USD 0.16 bn by 2010, a CAGR of 1% Government and industry taking firm action to reduce piracy of all forms International Old Films Music Devotional Regional Film Music Source: IMaCS Analysis, Industry estimates MEDIA & ENTERTAINMENT www.imacs.in Market Overview Indian Radio Industry Singing a growth tune India has over 190 million radio sets reaching 99% of the population More than 330 FM Radio licenses being allotted by the Government (~240 already allotted) Move from license fee to revenue share model to give a further boost to the industry New platforms to access radio like satellite radio, mobile phone radios and internet radio growing fast Revenues in 2005 - USD 0.06 bn Expected revenues in 2010 - USD 0.26 bn, a CAGR of 32% Ad spend on radio set to increase with more FM radios operational Projected size of Indian Music Industry 3.0 3.7 5.5 2005E 2006F 2007F 2008F 2009F Years 2010F 9% 10% Global 8% 1% E*: Estimate F*: Forecast Source: IMaCS Analysis, FICCI - PWC Frames 2006 Report 7% 5% 0% 0.0 13% 15% Source: IMaCS Analysis India 5.0 8.0 12.0 Australia 10.0 10.0 Spain CAGR 32% 20% 20% USA INR Billion 15.0 Share of total ad spend Global ad Spend on Radio Sri Lanka • • • • • • • MEDIA & ENTERTAINMENT www.imacs.in Market Overview Indian Print Media Industry Reader’s choice Leading Newspapers in India • More than 220 million readers of English and • English language newspapers and magazines • Newspapers account for 90% of the market, Magazines~10% market share • Revenues expected to grow from USD 2.38 bn in 2005 to USD 4.37 bn in 2010 21.0 13.8 10.9 10.8 10.4 10.4 9.6 9.4 Rajasthan Patrika English Times of India The Hindu Hindustan Times • Subscriptions contribute 57% of the total revenues, rest by Advertisement 7.4 4.1 3.9 Projected size of Indian Music Industry 250 INR Billion number of strategic overseas investments 21.2 Dainik Bhaskar Eenadu Lokmat Amar Ujala Hindustan Daily Thanthi Dinakaran readership close to 10% of the total base • Print media, especially newspapers, attracting a large Readership (Million) Vernacular Dainik Jagran vernacular language newspapers and magazines 200 150 109 12 1 135 2005E 2006F 2007F 153 173 195 100 50 0 Source: NRS 2006 Source: IMaCS Analysis, FICCI - PWC Frames 2006 Report 2008F 2009F Years E*: Estimate, F*: Forecast 20 10F www.imacs.in MEDIA & ENTERTAINMENT Government regulations & policy • Market Overview • Government regulations & policy • Advantage India and business opportunities MEDIA & ENTERTAINMENT www.imacs.in Government regulations & policy FDI Regulations for Indian Media & Entertainment Industry…1 Guidelines for Foreign Direct Investment in the Indian Media & Entertainment Industry 1. Advertising FDI is permitted upto 100% through the automatic route 2. Films FDI is permitted for the full value chain like film financing, production, distribution, exhibition and marketing upto 100% through the automatic route 3. Print Media (a) FDI up to 100% is permitted in publishing/printing scientific & technical magazines, periodicals & journals (b) FDI up to 26% is permitted in publishing News Papers and Periodicals dealing in News and Current Affairs subject to a few conditions Source: IMaCS Analysis MEDIA & ENTERTAINMENT www.imacs.in Government regulations & policy FDI Regulations for Indian Media & Entertainment Industry…2 Guidelines for Foreign Direct Investment in the Indian Media & Entertainment Industry 4. Broadcasting a)TV Software Production 100% foreign investment allowed subject to a few conditions b) Setting up hardware facilities, such as uplinking, HUB, etc. FDI allowed upto 49% (inclusive of both FDI and portfolio investment) of paid up share capital c) Cable Network FDI allowed upto 49% (inclusive of both FDI and portfolio investment) of paid up share capital. d) Direct-to-Home Maximum foreign investment of 49% paid up share capital include e) Terrestrial Broadcasting FM Foreign investment is permissible to the extent of 20% (including portfolio investment, investment by OCB/NRI/PIO etc.) of the paid up share capital of the company. The licensee should be a company registered in India under the Companies Act. f) Terrestrial TV No private operator is allowed in terrestrial TV transmission. g) Establishment and Operation of Satellite FDI up to 74% is permitted with prior Government approval Source: IMaCS Analysis www.imacs.in MEDIA & ENTERTAINMENT Advantage India and business opportunities • Market Overview • Government regulations & policy • Advantage India and business opportunities www.imacs.in MEDIA & ENTERTAINMENT Advantage India & business opportunities Advantage India • Second fastest growing economy in the world • Favourable FDI policies for all the segments of Media & Entertainment Industry • Regulatory environment being strengthened for faster growth of the industry • High quality of creative and technical talent pool • Large untapped potential especially in Television and Films • Indian consumers willing to spend more on entertainment • Growing middle class with more disposable income MEDIA & ENTERTAINMENT www.imacs.in Advantage India & business opportunities Business opportunities in the Indian Media & Entertainment Industry…1 Television • • • • • • Production/co-production of content Broadcasting of TV channels Distribution of TV channels through cable and new delivery platforms like DTH and IPTV Technology transfer for digital content creation Marketing of TV rights/air times Strategic investment in existing companies in broadcasting, distribution and content Radio • Investment in FM and Satellite Radio • Content creation for radio channels • Marketing of air times MEDIA & ENTERTAINMENT www.imacs.in Advantage India & business opportunities Business opportunities in the Indian Media & Entertainment Industry…2 Films • • • • • • Production/co-production of films Processing, distribution and exhibition of Bollywood films Shooting of overseas films in India Development, distribution and exhibition of Hollywood/overseas films Training for technical and functional areas of film making Supply of Hardware to film studios Music • Creation of content for film and non-film music • Marketing of film and non-film music • Strategic investment in local music companies Print • Strategic investment in news and non-news publications • Tie-ups for providing content to Indian publications www.imacs.in MEDIA & ENTERTAINMENT Advantage India & business opportunities Key Players - Indian Film Industry MEDIA & ENTERTAINMENT www.imacs.in Advantage India & business opportunities Key Players Indian Television & Radio Industry Doordarshan is the largest TV network in India with 19 channels reaching 90% of the population through 1400 transmitters News Corporation owned Star TV Network entered India in 1991 and offers more than 10 channels in mass entertainment, sports, news,, music, movies etc. Zee is one of the pioneers of the Indian Television industry with 22 channels in its bouquet. It is present in broadcasting, cable distribution, production and distribution of films, creation of animation software among others Sony Pictures Entertainment is present in India with 3 channels focusing on Hindi entertainment and sports Sun Network is based in South India with 14 channels in four languages and a focus on entertainment, news, movies, music, kids shows among others. Also present in FM Radio Walt Disney is present in India through two kids channels and has recently bought one more kids channel All India Radio, owned by Government of India is the largest radio network in India with 214 broadcasting centres covering more than 99% of the Indian population MEDIA & ENTERTAINMENT www.imacs.in Advantage India & business opportunities Key Players Indian Music Industry BMG is one of the earliest music companies to enter India in a joint venture with Crescendo, an Indian company EMI owned Virgin Records is another international music company operating in India Universal is one of the leading names in Indian music industry with a strong presence across all genres Sony is one of the leading music companies of India with a presence in both Indian and International albums Saregama, formerly known as The Gramophone Company of India Ltd. is India’s oldest music company with largest repertoire of music across all genres and languages including top-recording artistes of the past hundred years MEDIA & ENTERTAINMENT www.imacs.in Advantage India & business opportunities Key Players Indian Print Media Industry One of the leading English dailies owned by Bennett, Coleman & Co, a leading media group of India Another leading English newspaper with multiple editions published from many states in India One of the oldest newspapers with a strong presence in South India Hindustan Times is another leading English newspaper with more than 4 million readership mostly in North India Published in English and Malayalam, this newspaper enjoys a strong readership in South India. 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